REMARKS BY THE PRESIDENT
ON THE BUDGET
The James S. Brady Press Briefing Room

12:37 P.M. EST

THE PRESIDENT: Good afternoon. I wanted to take this
opportunity to say a few words about our latest budget projections and
what they say about the continuing strength of the American economy.

We began eight years ago to put our fiscal house in order at a
time when the federal deficit was $290 billion and rising and the
national debt had quadrupled in the previous 12 years. Interest rates
were high, growth was low and the confidence of the American people was
shaken.

Our new strategy of fiscal discipline, investing in our people
and expanding trade has helped to bring us the longest economic
expansion in history, that has given us the chance along with continued
fiscal discipline to balance the budget, to turn decades of deficits
into the biggest back-to-back surpluses in history.

Over the past three years, we have paid down our national debt
by $360 billion. Today, we received more good news. Our updated
projections show that in this fiscal year alone we expect to pay down
the debt by an unprecedented $237 billion, meaning that over the course
of just four years, we will have paid down the debt by $600 billion.

When I took office, our nation's debt was projected to be $6.4
trillion this year. At the end of this year, it will instead be $3.2
trillion, one half of what it was projected to be. It will be 31
percent of our annual gross national product. In 1993, it was 50
percent of our gross national product.

In interest rates savings alone, there will be in one year --
this year -- $166 billion. We are spending -- this year, we will spend
$166 billion less in interest on the debt than we were projected to be
spending eight years ago.

There is more good news in these numbers. Let's start with
what the budget experts called the baseline. That's a budget that just
increases with inflation and no new initiatives. The new projections
show that if we took that budget and committed the entire surplus to
reducing the debt, we could make America debt-free by 2009.

Of course, no one is suggesting that any administration and
Congress will go that long with no new initiatives. I have often said
that I believe we should use a portion of the surplus to make critical
investments in education, provide a prescription drug benefit through
Medicare to our seniors and have a targeted tax cut.

If the incoming administration and the new Congress make such
decisions, they could still get us out of debt early. And I want to
emphasize, obviously, it is for the incoming administration and the new
Congress to decide exactly which projects to address and in what manner.
But these new projections mean that a fiscally responsible approach that
includes new investments similar to the ones I described would still
permit us to make America debt-free by the end of the decade -- in other
words, two years earlier than the last time we met.

Therefore, even though I told you I would never draw on
another one of these charts -- (laughter) -- because there is more good
news, I'm going to do it. But this is the last time I will do it --
(laughter) -- this year. It means we can get out of debt by 2010. Now,
that is a future that all Americans can look forward to. And we don't
wait to reap the benefits of this sort of debt reduction. By paying
down the debt, we have already helped to keep interest rates down.

This is an amazing thing. Secretary Summers told me this
before I came out here. After eight years of very strong economic
growth, long-term interest rates are about 2 percent lower than they
were when I took office. That's meant lower mortgage payments, lower
car payments, lower student loans, lower business loans. It has freed
up more capital for private sector investment. We aren't borrowing the
money that people thought we would be borrowing in the government, and
that means there is more money for others to borrow at lower cost.

If we stay up on the path that got us here, by 2010 we will
free up 12 cents of every dollar the American people pay in taxes that
can go back to them in tax relief or can go into investment in our
common future. And that is a profoundly important thing. Just think of
it, in nine years, 12 percent of the federal budget now committed to
interest on the debt could be gone, and that money then would be free
for tax relief or for investment in our future.

I think, as I have said many times, that as these interest
rates go down, some of this money ought to be dedicated to Social
Security, because no matter what path you take for preparing for the
retirement of the baby boom generation, any of the proposed scenarios
have a significant associated costs. And one of the ways to do this and
a way that is painless to the American people is to take advantage of
the fact that you're not going to be making interest payments that
previously would have been made.

This shows the long-term consequences of a long-term
responsible budget policy. There are huge economic benefits. And if we
continue, then we can honestly say for the first time since Andrew
Jackson was President in 1835, the children of America will face the
future unburdened by the mistakes of the past. That is something that I
believe we ought to do. The American people have earned an
unprecedented opportunity to build that kind of America for our children
and I hope we will do it. Thank you very much.

Q Mr. President, since last we asked you about the Middle
East yesterday, there have been a number of developments. There have
been bombings in Tel Aviv, an ambush. Prime Minister Barak did not go
to that summit meeting in Egypt. What does that make you think about
the prospects for nailing down a final agreement while you're still in
office?

THE PRESIDENT: Well, first of all, I condemn the violence.
And I believe it is the violence and the bus that prevented the Prime
Minister from going to Egypt; I don't think it is a lack of desire to
pursue the peace process. Chairman Arafat is consulting with President
Mubarak and I believe wants to talk to some of the other Arab leaders.

The important thing to note is that Israel has said -- I put
some ideas on the table. They go beyond where we were at Camp David;
they meet the fundamental needs that both sides expressed at Camp David.
And the Israelis said that they would agree to try to close the
remaining gaps within the parameters of the ideas I put forward if the
Palestinians will agree. And I think that this latest violence only
reminds people of what the alternative to peace is.

Look, I expect there to be more in the next few days, as long
as we're moving toward peace. There are a lot of enemies of peace in
the Middle East, and there are a of people that have acquired almost an
interest in the preservation of the status quo and the agony of the
Israelis and the abject misery of most of the Palestinian population.

So I expect that we will have to continue to combat violence.
But if we can get a peace which meets the fundamental longstanding
desires of both parties, and we start to have common efforts in security
that go even beyond what we've had for the last few years, and we start
to have common efforts to build an economic future that benefits
everyone, we will have more political and economic stability and we'll
have a different future. But in the meanwhile, this thing has been
going on a long time and a lot of people don't want to give it up. And
so they're going to try to disrupt it.

But if you just look at the last few months, it's the best
argument for going ahead and finishing this. It's not going to get any
easier. So this is by far the closest we have ever been. We are much
closer than we were at Camp David. But there are still differences and
we're just waiting. If the -- the Israelis have said they will meet on
these conditions within the parameters that I laid out; if the
Palestinians will, and the Palestinians are negotiating -- or talking --
excuse me -- with the other Arabs, and we'll just see what happens.

Q Mr. President, did the President-elect have any influence
on your decision not to go to North Korea?

THE PRESIDENT: No. He said -- actually, we had a very, very
good talk about it, and he did not discourage it at all. And it would
not be fair to put that on him. Let me just say, I briefed him on what
I was doing. I told him that Sandy Berger and Secretary Albright had
talked to General Powell and Condi Rice about it, and I explained what
we were trying to do. But I also told him that I wouldn't take the trip
unless I thought that I had time to organize it and devote the time to
it to make it right, because I was convinced that because of the
leadership of President Kim in South Korea, and because of the very good
talks that we have had with the North Koreans and the success we've had
now for six years on the nuclear issue, that further progress could be
made and that it might just have to be something that was done when he
became President.

And that is the conclusion I made. We've made a lot of
progress with the North Koreans. On what we're discussing now, on the
missile issues, we've made a lot of progress. But I concluded that I
did not have sufficient time to put the trip together and to execute the
trip in an appropriate manner in the days remaining.

Q Were they willing to go for a halt in the missile --

THE PRESIDENT: I think that's all I should say. We made a
lot of progress with them, and I believe that the next administration
will be able to consummate this agreement. I expect visits back and
forth. I think a lot of things will happen, and I think it will make
the world a much safer place. I feel very good about what we've done.
I simply concluded that in the days I have remaining I didn't have the
time to put the trip together in the proper way and to execute it in the
proper way. And so that's why I decided not to go.

But you should not infer from that that I'm concerned about
it. Indeed, I'm very pleased with the progress that has been made, and
I expect the next administration to build on it. And I think they'll be
pleased, too, when they look at the facts.

Q Mr. President, in your remarks on the budget you almost
seem to be addressing an audience beyond this room, beyond most people
on television. You seem to be addressing your remarks to the next
administration. Do you think -- what impact do you think a tax cut of
the proportions that George W. Bush campaigned on would have on the
course of the arrow on your chart?

THE PRESIDENT: Well, first, I don't think it's appropriate
for me to comment on the specific decisions they will have to make --
and the Congress will make. But you can't see any of this in isolation.
You have to say -- the real issue on the fiscal side is, what is the
revenue estimate; are you being conservative? We always were, and even
these reflect, by the way, pretty conservative estimates -- because you
can always have a bad couple of years and it throws everything off.

And then it's not just a question of a tax cut; you have to
ask yourself, in all these things -- when you all are doing the math in
your head you have to do the tax cuts plus whatever extra spending there
will be, plus whatever you do on Social Security. And it's the
aggregate amount of money here, it's not just a question of the tax cut.

So I don't really think I can comment, nor do I think I should
comment on the specifics. I'm more interested in the big picture, the
arithmetic issues. But I'm just saying that I believe that as long as
we can do so, we should be shooting for a debt-free America by the end
of the decade, because I think that that will strengthen our country
enormously.

Q Mr. President, what can you tell us about the Clinton
family debt picture? Is there a new house in your future here in
Washington, D.C.?

THE PRESIDENT: Well, I hope so. Hillary has got to have
someplace to live. But we don't have -- we haven't closed a deal yet.
When we do we'll let you know. She needs an address, and I'd like to
have someplace to come see her. (Laughter.)

Q Will you be able to afford all that, Mr. President?

THE PRESIDENT: Well, I hope so. I'm going to go out and go
to work. And --

Q Where? (Laughter.)

THE PRESIDENT: I expect to make a living and I'll get out of
your hair and get out of the media spotlight and go back to making a
living. And I expect to -- I'll do a -- well, I'll write a book and do
a few other things. But I think --

Q For $8 million? (Laughter.)

THE PRESIDENT: I think I'll be able to support her. I don't
know. I don't have two best-sellers to my credit like she does, so I
don't know.

Q Mr. President, back on the Middle East. Two elements
seem different now than were present at Camp David. First of all, the
outlines of peace proposal are open, and you want* to take a look at
them. And second, there seems to be much more of an effort to involve
Arab leaders as the negotiations move forward. Those two things were
not present at Camp David, yet the Palestinians still are holding back.
What do you think is holding them back, and what do you think would push
them across the line and move this forward?

THE PRESIDENT: Well, I think the -- first of all, I think
that while we have talked to all of the Arab leaders, I'm not sure that
Mr. Arafat has gotten to talk to enough of them. I think that he
believes that -- he has always believed, I thought, that he was
representing not only his people, but the larger Arab world, and in some
ways the larger Muslim world in the Jerusalem issues. So I think that
he's trying to work through that.

But I don't think, as I've said repeatedly over the last
several years, I think when you're in a period like this -- that is,
where we're sort of -- the thing is in gestation and it's either going
to go forward or it's not -- I think that the less I say about it, the
better.

Q Is your decision not to impose sanctions on Japan for
their whaling program a reflection of the fact that you view your
friendship with Japan more important than the environment? And as a
follow-up, how do you expect a Bush administration to go through with
Japan-U.S. trade relations?

THE PRESIDENT: Well, the first thing is, the answer to the
first question is, no. We're working this whaling issue. We have
serious disagreements with them about it, and we have some options that
we're pursuing. But is our security relationship with Japan important?
Of course it is. Is our larger economic relationship important? Of
course it is. Is this whaling issue a big deal? I think it is.

So I'm trying to leave this situation in the best possible
light for my successor to look at all available options and go forward.
That's what I'm trying to do.

Q How can you impose sanctions when the deadline has
already passed?

THE PRESIDENT: Well, there are lots of other things that can
be done on this, though, in the future, and I did what I thought was
right, given all the factors involved. But I still think this whaling
issue is an important issue and I think that -- I understand the role it
has in Japanese culture and the political impact of the interests that
are involved in it. But I think they are going to have to modify their
practices.

Q Are you going to sign the World Criminal Court Treaty?

THE PRESIDENT: I haven't decided that. I have a couple of
days and I'm getting a last paper on it and then I'm going to discuss it
with our people.

Q Back to the Middle East. Have you given the Palestinians
any sort of deadline to give you an answer, or are they going to be
given an unlimited amount of time to decide? And also, do you expect
them to come here? Do you need to talk to them again before you can see
if they are making headway?

THE PRESIDENT: Well, first of all, I think it is obvious we
are all operating under a deadline. We're all operating under a
deadline; it's just some of us know what our deadline is.

What I have said to them is, there is no point in our talking
further unless both sides agree to accept the parameters that I've laid
out -- not because I am trying to dictate this, but because I have
listened to them for months and months and months -- indeed for eight
years -- and this is the most difficult of all the issues I've dealt
with. If there is a peace agreement here, I'm convinced it's within the
four corners I laid out.

And then there are still -- they both have legitimately a lot
of questions and they ought to ask those questions and get answers to
them. But there is no point in even doing that unless we've got a basic
framework so we can close. The time has come to close here. And the
last several months have shown us this is not going to get any easier
and prolonging it is only going to make it worse. So I'm doing my best
to facilitate what I think is what they want, which is to try to resolve
this.

Q Do you really think you can resolve it in the remaining
-- are you really optimistic that you can resolve it in the remaining
three weeks? And, if you cannot, would you keep at it after you leave
office?

THE PRESIDENT: Well, the answer to your first question is I
think that if it can be resolved at all, it can be resolved in the next
three weeks. I don't think the circumstances are going to get better.
I think, in all probability, they'll get more difficult.

In terms of what I do when I leave office in the way of
official work like that, that will be up to the next administration and
any parties there or anywhere else in the world. That would not be for
me to say.

One of the things I am determined to do when I leave -- I'm
going to work until the last day, because I'm drawing a paycheck and I'm
going to work to the last day. After that, I'm going to observe
strictly what I think is the proper role of a former President. And we
will have a new President and he has to make the calls and I will
support that entirely. Around the world, I think that's very, very
important. So anything I might ever do, indeed, for the whole rest of
my life, not just in the first few years I'm out of office, will be
determined by what whoever happens to be the President does or doesn't
want me to do, and whatever parties in other parts of the world do or
don't want me to do. That's just the only appropriate thing and I will
rigorously adhere to that.

Q Have both sides asked you to, sir? Have both sides asked
you to keep at it?

THE PRESIDENT: No, I didn't say that. It depends upon -- I
think that it is -- first of all, in this context, I believe that is
exceedingly unlikely. That is, I honestly believe, given the pendency
of the Israeli election, and the developments within the Palestinian
community and the larger Arab world, that the best chance they have to
make an agreement is in the next three weeks.

Now, none of us who long for peace in the Middle East would
ever give up on it. But I think that is both a theoretical question and
an unlikely one, because if you look at where the forces are today, they
have a better chance to do it now, if they're ever going to do it. It's
just -- it's really hard. If it weren't hard, they would have done it
before this. I mean, they signed the Oslo Agreement in '93 and put all
this stuff off to the end because they knew it was hard, and it's still
hard.

But if you look at where we've been the last few months, it's
not going to get any easier. And I just hope that -- I've said this
before, I said it earlier -- we had a confluence of Christmas, Hanukkah
and the end of Ramadan and the beginning of the Eid, and maybe there's
something in the stars that will give them the divine strength and
inspiration to do it. I don't think it's going to get easier.

Q Well, are your terms negotiable, or are they just
parameters?

THE PRESIDENT: No, they're the parameters. The negotiations,
in other words, have to occur within them.

Q So East Jerusalem could be negotiated more?

THE PRESIDENT: No. I do not want to talk more about this.
They understand exactly what I mean. Both sides know exactly what I
mean and they know exactly what they still have to do, and that's enough
right now.